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Exhibit (h)(8)
ADMINISTRATION AGREEMENT
This Agreement is made as of September 15, 1997 between PACIFIC
HORIZON FUNDS, INC., a Maryland corporation (the "Company"), and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Bank").
WHEREAS, the Company is an open-end management investment company and
is so registered under the Investment Company Act of 1940 ("1940 Act"); and
WHEREAS, the Company offers and maintains multiple investment
portfolios as specified in its registration statement on Form N-1A (the
"Funds"); and
WHEREAS, the Company offers for sale separate series of shares of
common stock in each Fund (the "Shares"); and
WHEREAS, pursuant to a Distribution Agreement dated September 15, 1997
(the "Distribution Agreement") between the Company and Provident Distributors,
Inc. ("Provident"), the Company has retained Provident as its Distributor to
provide for the sale and distribution of the Shares; and
WHEREAS, the Company desires to retain the Bank as its Administrator
to provide it with administrative services for the Funds and the Bank is
willing to provide such services for the Funds;
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties hereto agree as follows:
I. ADMINISTRATION
1. APPOINTMENT OF ADMINISTRATOR.
The Company hereby appoints the Bank as Administrator of each Fund on
the terms and for the period set forth in this Agreement, and the Bank
hereby accepts such appointment and agrees to provide the services and
have the duties set forth in this Section I performed for the
compensation provided in this Section. The Company understands that the
Bank now acts and shall continue to act as administrator of various
investment companies and fiduciary of other managed accounts, and the
Company has no objection to the Bank's so acting so long as its
services under this Agreement are not impaired thereby. In addition, it
is understood that the persons employed by the Bank to assist in the
performance of its duties hereunder shall not devote
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their full time to such services and nothing herein contained shall be
deemed to limit or restrict the right of the Bank or any affiliate of the
Bank to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
2. SERVICES AND DUTIES.
A. Subject to the supervision and control of the Company's Board of
Directors, the Bank shall provide facilities, equipment and personnel
to carry out those administrative services that are for the benefit
of all series of Shares in each of the Funds, provided that such
services shall not include those investment advisory functions which
are to be performed by the Company's Investment Adviser, the services
of Provident as Distributor pursuant to the Distribution Agreement,
those services to be performed by the Bank of New York and PNC Bank,
National Association ("Custodians") pursuant to the Company's Custody
Agreements, those services to be performed by BISYS Fund Services,
Inc. or any successor transfer agent ("Transfer Agent") pursuant to
the Company's Transfer Agency Agreement and those services normally
performed by the Company's counsel, auditors and successors of such
aforementioned service providers. The responsibilities of the Bank
include, without limitation, the following services:
1. Participation in the periodic updating of the prospectuses and
statements of additional information for the Funds (the
"Prospectuses") and accumulation of information for and, subject
to approval by the Company's Treasurer and legal counsel,
coordination of the preparation, filing, printing and
dissemination of reports to the Funds' shareholders and the
Securities and Exchange Commission (the "Commission"), including
but not limited to annual reports and semi-annual reports on
Form N-SAR, notices pursuant to Rule 24f-2 and proxy materials;
2. Computation of each Fund's net asset value per share on each
business day and, with respect to the Company's money market
funds determination of the variance of each Fund's amortized
cost value per share from its market value per share;
3. Calculation of the expenses, dividends and capital gain
distributions of each Fund;
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4. The Bank shall calculate expenses and dividends and capital gain
distributions to be paid to each Fund's shareholders in conformity with
subchapter M of the Internal Revenue Code.
5. Payment of all approved expenses of maintaining the offices of the Company,
wherever located, and arrangement for payment by the Company of all Board
approved expenses payable by the Funds;
6. Determination, after consultation with legal counsel for the Company, of
the jurisdictions in which notice must be provided and fees paid in
connection with the sale of shares to investors. Responsibility for the
registration, notification, qualification or payment in connection with the
sale of shares and for the maintenance of the qualification of the Shares
for sale under the securities laws of such jurisdictions; (Payment of Share
registration fees and any fees for qualifying or continuing the
qualification of the Company shall be made by the Company);
7. To the extent permitted by law, provision of the services of persons who
may be appointed as officers of the Company by the Company's Board of
Directors;
8. Preparation and filing of the Company's federal, state and local income
tax returns;
9. Preparation and, subject to approval of the Company's Treasurer,
dissemination of the Company's and each Fund's quarterly financial
statements and schedules of investments to the Company's directors, and
preparation of such other reports relating to the business and affairs of
the Company and each Fund as the officers and directors of the Company may
from time to time reasonably request; and
10. Provision of internal legal and accounting compliance services;
11. Providing and supervising a facility to receive purchase and redemption
orders via toll-free IN-WATS telephone lines;
12. Overseeing the performance of the Custodians, and Transfer
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Agent including without limitation a review of all correspondence from
the Transfer Agent of shareholders for accuracy and timeliness in
handling inquiries and review of dividend checks, statements and
purchase and redemption orders for proper turn-around;
13. Making available information concerning each Fund to shareholders;
distributing written communications to each Fund's shareholders such
as periodic listings of each Fund's portfolio securities, annual and
semi-annual reports, and Prospectuses and supplements thereto; and
handling shareholder problems and calls relating to administrative
matters;
14. Providing and supervising the services of employees ("relationship
coordinators") whose principal responsibility and function will be to
preserve and strengthen each Fund's relationships with its
shareholders;
15. Providing for the preparing, supervising and mailing of confirmations
for all purchase and redemption orders from shares; and
16. Providing and supervising the operation of an automated data
processing system to process purchase and redemption orders for
shares.
B. Assuring that persons are available to transmit redemption requests to the
Transfer Agent as promptly as practicable;
C. Assuring that persons are available to transmit orders accepted for the
purchase of Shares to the Transfer Agent as promptly as practicable;
D. Preparing regular reports for internal use and for distribution to the
Company's Board of Directors concerning shareholder activity;
E. Responding to shareholder inquiries sent to the Company;
F. The Bank shall oversee the maintenance by the Custodians and Transfer Agent
of the books and records required under the 1940 Act in connection with
performance of the Custody Agreements and
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Transfer Agency Agreement, and shall maintain (or oversee the maintenance
by such other persons as may from time to time be approved by the Company's
Board of Directors) such other books and records (other than those required
to be maintained by the Funds' investment adviser) as may be required by
law or may be required for the proper operation of the business and affairs
of the Funds. Without limiting the foregoing, the Bank shall on behalf of
the Funds and at the Funds' expense use reasonable efforts to obtain from
the Company's prior administrator all books and records pertaining to the
Funds that are required to be maintained under the 1940 Act and that are in
the prior administrator's possession (provided, however, (i) that the Bank
shall not be liable to the Company for the Bank's failure to obtain all the
books and records from the prior administrator so long as the Bank used
reasonable efforts to obtain such books and records and (ii) that the Bank
shall not be obligated to initiate or pursue litigation against the
Company's prior administrator to obtain such books and records) and shall
be responsible for the proper maintenance of such records throughout the
term of this Agreement. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Bank agrees that all such books and records which
it maintains, or is responsible for maintaining, for the Company and the
Funds are the property of the Company and further agrees to surrender
promptly to the Company any of such books and records upon the Company's
request. The Bank further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act said books and records required to be
maintained by Rule 31a-1 under said Act. The Company shall have the right
at any time to inspect the records (including work papers and the other
related documents) in the possession of the Administrator relating to the
Company.
G. In performing its services and duties hereunder as Administrator for the
Funds, the Bank will act in conformity with the Company's Charter, Bylaws
and Prospectuses and with the instructions and directions of the Board of
Directors of the Company, and will conform to and comply with the
requirements of the 1940 Act and all other applicable federal or state laws
and regulations;
H. The Bank shall at its expense enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provision for
emergency use of electronic data processing equipment to the extent
appropriate equipment is available. In the event of equipment failures, the
Bank shall, at no additional expense to the Company, take reasonable steps
to minimize service interruptions but
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shall have no liability with respect thereto;
I. The Bank shall act as liaison with the Fund's independent
public accountants and shall take all reasonable action in the
performance of its duties under this Agreement to assure that
the necessary information with respect to its duties hereunder
is made available to such accountants for the expression of
their opinion, as required by the Fund;
J. The Bank shall assist the Custodians and Transfer Agent and the
Company's Investment Adviser, counsel and auditors and any
other service providers as required to carry out the business
and operations of the Funds;
K. The Bank shall assist in developing compliance procedures for
each of the classes of the Company's Funds and shall monitor
such compliance procedures, which will include without
limitations, compliance with each Fund's investment objective,
policies and limitations procedures, guidelines, restrictions,
tax matters, and applicable laws and regulations.
L. The Bank shall review and evaluate the daily pricing of
securities for each Fund; and
M. The Bank, at the expense of the Company, shall maintain each
Fund's fidelity bond as required by the 1940 Act and shall
maintain errors and omissions insurance on behalf of the
Company.
3. SUBCONTRACTORS.
It is understood that the Bank may from time to time employ or associate
with itself such person or persons as the Bank may believe to be
particularly qualified to assist in the performance of this Agreement;
provided, however, that, i) the compensation of such person or persons
shall be paid by the Bank, ii) notwithstanding anything herein to the
contrary the Bank shall be as fully responsible to the Company for the
acts and omissions of any subcontractor as the Bank is for its own acts
and omissions, and iii) the Board of Directors of the Company shall give
prior approval for the use of or change in any sub-administrator or fund
accountant to be employed by the Bank on behalf of the Company. Without
limiting the generality of the foregoing, it is understood that the Bank
has entered into an agreement with PFPC Inc. and Bank of New York ("Fund
Accountants") under which said institutions will provide certain
accounting, bookkeeping, pricing and
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dividend and distribution calculation services with respect to the
Funds at the expense of the Funds.
Furthermore, it is understood that the Bank has entered into an
agreement with PFPC Inc. to provide certain sub-administration services,
including but not limited to, facilities, record keeping, registration,
tax preparation, and oversight services at the expense of the Bank.
4. EXPENSES ASSUMED AS ADMINISTRATOR.
Except as otherwise stated in this subsection 4, the Bank shall pay all
expenses incurred by it in performing its services and duties hereunder
as Administrator including the cost of any independent pricing service
used in connection with the Funds. Other expenses to be incurred in the
operation of the Funds (other than those borne by the Company's
investment adviser) including taxes, interest, brokerage fees and
commissions, if any, fees of directors who are not officers, directors,
partners, employees or holders of 5 percent or more of the outstanding
voting securities of the Company's investment adviser or the Bank or
their subcontractors or any of their affiliates, Securities and
Exchange Commission fees and state blue sky registration and
qualification fees, advisory fees, fees payable to shareholder
organizations, fees for special management services, charges of
custodians, transfer and dividend disbursing agents' fees, certain
insurance premiums, outside auditing and legal expenses, costs of
maintaining corporate existence, costs attributable to shareholder
services, including without limitation telephone and personnel
expenses, costs of preparing and printing Prospectuses, or any
supplement or amendment thereto, necessary for the continued effective
registration of the Shares under the federal or state securities laws,
costs of printing and distributing any Prospectus, supplement or
amendment thereto for existing shareholders of the Fund described
therein, costs of shareholder reports and corporate meetings and any
extraordinary expenses will be borne by the Funds. It is understood
that certain advertising, marketing, shareholder servicing,
administration and/or distribution expenses to be incurred in
connection with the Shares may be paid by the Company as provided in
any Plan which may in the sole discretion of the Company be adopted in
accordance with Rule 12b-1 under the 1940 act and that such expenses
will be paid apart from any fees under this Agreement.
5. COMPENSATION. For the services provided and the expenses assumed as
Administrator pursuant to this Agreement, the Company on behalf of each
Fund will pay the Bank a fee, computed daily and payable monthly as
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described in the fee schedule attached as Exhibit A.
II. CONFIDENTIALITY
The Bank shall treat confidentially and as proprietary information of
the Company all records and other information relative to the Company
and the Funds and prior or present shareholders or those persons or
entities who respond to Provident's inquiries concerning investment in
the Company except to the extent information is publicly available or
available to the Bank from sources other than the Funds, and will not
use such records and information for any purpose other than performance
of its responsibilities and duties hereunder or under any other
agreement with the Company, except after prior notification to and
approval in writing by the Company, which approval shall not be
unreasonably withheld and may not be withheld where the Bank may be
exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted
authorities or when so requested by the Company.
III. LIMITATIONS OF LIABILITY
The Bank shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Company or by any Fund in connection
with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or negligence on its part
in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. Any person, even though
also and officer, director, partner, employee or agent of the Bank who
may be or become an officer, director, employee or agent of the Company,
shall be deemed, when rendering services to the Company or to any Fund
or acting on any business of the Company or of any Fund (other than
services or business in connection with the Bank's duties as
Administrator hereunder or under any other agreement with the Company)
to be rendering such services to or acting solely for the Company or
Fund and not as an officer, director, partner, employee or agent or one
under the control or direction of the Bank even though paid by the Bank.
IV. DURATION AND TERMINATION
This Agreement shall become effective September 15, 1997 and, unless
sooner terminated as provided herein, shall continue until October 31,
1998. Thereafter, if not terminated, this Agreement shall continue
automatically as to a particular Fund for successive terms of one year,
provided that such continuance is specifically approved at least
annually (a) by a vote of a majority of those members of the Board of
Directors of the Company who are not parties to this Agreement or
"interested persons" of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Board
of Directors of the
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Company or by vote of a "majority of the outstanding voting securities"
of such Fund; provided, however, that this Agreement may be terminated
by the Company at any time with respect to any Fund, without cause and
without the payment of any penalty, by vote of a majority of the entire
Board of Directors of the Company or by a vote of a "majority of the
outstanding voting securities" of such Fund on 60 days' written notice
to the Bank at any time, without the payment of any penalty and by the
Bank, on 90 days' written notice to the Company at any time, without the
payment of any penalty. This Agreement will immediately terminate in the
event of its "assignment." (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meaning as such terms have in the 1940
Act.)
V. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the
party against which an enforcement of the change, waiver, discharge or
termination is sought.
VI. NOTICES
Notices of any kind to be given to the Company hereunder by the Bank
shall be in writing and shall be duly given if mailed or delivered to
the Company at Association of American Universities, 0000 Xxx Xxxx
Xxxxxx, XX, Xxxxx 000, Xxxxxxxxxx, X.X. 00000, Attention: Xx. Xxxxxxxxx
J. Pings, President, with a copy to Drinker Xxxxxx & Xxxxx, LLP,
Philadelphia National Bank Building, 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx,
XX 00000, Attention: W. Xxxxx XxXxxxxx, III, Esq. or at such other
address or to such individual as shall be so specified by the Company to
the Bank. Notices of any kind to be given to the Bank hereunder by the
Company shall be in writing and shall be duly given if mailed or
delivered to the Bank at 333 X. Xxxxxxx Avenue, 25th Floor, Unit 39277,
Xxx Xxxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxx, or at such other
address or to such individual as shall be so specified by the Bank to
the Company.
VII. MISCELLANEOUS
The obligations of each Fund under this Agreement shall be several
(and not joint, or joint and several) obligations of each Fund. The
captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be
signed in one or more counterparts, each of which shall be an original
and all of which together shall be deemed one and the same document. If
any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected
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thereby. Subject to the provisions of Section IV hereof, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors and shall be governed by California law
(without regard to principles of conflicts of law); provided, however, that
nothing herein shall be construed in a manner inconsistent with the 1940
Act or any rule or regulation of the Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
PACIFIC HORIZON FUNDS, INC.
By: /s/ Xxxxxxxxx Pings
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Vice President
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EXHIBIT A
FEE SCHEDULE
MONEY MARKET FUNDS
The Company shall pay the Administrator a fee, computed daily and payable
monthly based on the net assets of the California Tax-Exempt Money Market Fund,
Government Fund, Prime Fund, Tax-Exempt Money Fund, Treasury Fund and Treasury
Only Fund at the following rates:
0.10% of the first $7 billion of each Fund's average net assets, plus 0.09% of
the next $3 billion of each Fund's average net assets, plus 0.08% of each
Fund's average net assets over $10 billion. Such fee as is attributable to each
Fund shall be a separate charge to each such Fund and shall be the several (and
not joint and several) obligation of each such Fund.
VARIABLE NAV FUNDS
The Company shall pay the Administrator a fee, computed daily and payable
monthly based on the net assets of the following Funds at the rate noted. Such
fee as is attributable to each Fund shall be a separate charge to each such
Fund and shall be the several (and not joint and several) obligation of each
such Fund.
Aggressive Growth Fund and California Tax-Exempt Bond Fund:
0.30%
Capital Income Fund, Corporate Bond Fund, International Equity Fund, National
Municipal Bond Fund, Short Term Government Fund and U.S. Government Securities
Fund:
0.20%
Asset Allocation Fund, Blue Chip Fund and Intermediate Bond Fund:
0.15%
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